A comparative and local analysis of the winding up and liquidation of a limited liability company

Abstract

This thesis will focus on the provisions found in Chapter 386 of the Laws of Malta, the Companies’ Act, related to the winding up and dissolution of limited liability companies. In conjunction with this, several key roles will be discussed and analysed, such as the duties of the liquidator. A central theme of the study is the way these provisions interact with the creditor. The modus operandi of the legislative efforts that pertain to insolvency of limited liability companies lean heavily towards the dissolution of companies. Foreign jurisdictions having seemingly adopted a framework where several alternatives exist that precede, complement, or out-rightly replace the dissolution process. The rationale behind this is that by dissolving the company a large number of creditors are not going to be paid. Therefore, this thesis will delve into, and analyse, the way that foreign jurisdictions have developed their own winding up and insolvency frameworks. Chapter 1 will begin this study by giving a general overview of the development of Maltese company law, with particular attention to the way winding ups developed. Furthermore, this chapter will look into the way Maltese law determines whether a company is insolvent or not, and when dissolution proceedings should be resorted to. Chapter 2 will give an overview of the courts’ winding up procedure, whilst chapter 3 will illustrate and analyse the relevant provisions to the voluntary winding up mechanism. Chapter 4 will illustrate the company recovery procedure. Chapter 5 will give a broad view of the legal frameworks of foreign legislations, with special consideration being made to the way these jurisdictions circumvent the need to dissolve the companies. The thesis will conclude by highlighting several recommendations and proposals, influenced by the study on foreign jurisdictions, that could be transposed into our local framework.